Topic: StakeCube interest insights (Read 195 times)

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Details about the BTC, LTC and DOGE interest program.

Introduction


StakeCube.net released the BTC interest function in beta version at the end of March — and operates now completely automated for 3 high market cap coins in total.

That fact makes StakeCube the first proof-of-stake pool that let you earn interest at the highest rates on PoW-crypto assets just by holding them in your wallet — even if these coins are put into orders of the integrated exchange and waiting to get filled.

Today we take a detailed look at the functionality, rates, security mechanisms and the power of compound interest.




Functionality — Rates — Security


Simply said, the process starts as follows:
Create a free account on stakecube.net, get your personal deposit address for BTC, LTC and/or DOGE, send your coins to this address and you’re ready to go. You start earning interest from the first day, without any lock-in period and you can withdraw your coins at any time.
Once you have successfully made the deposit and reached the required minimum limit (~3–4$ equivalent), we will calculate the interest on your account balance and credit your coins every day to your wallet at a random time.

But how much interest do I get, how is the interest funded and are my coins safe? Let’s take a closer look at the numbers and wallet allocation…

General parameters and rates:







Each user receives a daily interest of 0.015% on the respective balance after reaching the minimum (even if the coins are in open orders).
This rate will be increased to 0.02% on 01 July 2019.[INDENT]
Expert tip:
The rate can be increased by an additional rate of 0.01% (= 0.03% in total) by registering masternodes in our own utility coin StakeCubeCoin [SCC] on the website. More information can be found in your pool-backend in the menu item “SCC Bonus System”.

[/INDENT]
Because the calculation is based on compounded interest, we obtain an annual rate of:

0.015% =((1+0,015%)³⁶⁵-1)*100 = 5,627% (current rate)
0.02% = ((1+0,02%)³⁶⁵-1)*100 = 7,572% (valid from 01.07.2019)
0.03% = ((1+0,03%)³⁶⁵-1)*100 = 11,57% (incl. 10 reg. SCC MNs)

Financial aspect, funds and wallet allocation

I think every user is aware that the coins have to be generated in some way in order to be able to pay these high rates as a provider.
This means in general that StakeCube has to make more coins than the maximal (0.03%) amount paid out daily to the users — otherwise the business wouldn’t work.

In actual numbers the whole process looks like at the time of writing:

BTC
Users with at least 0.0005 BTC in the wallet: 236
Quantity of BTC qualified for interest: 7.73849815 BTC
Daily interest amount at the maximum rate of 0.03%: 0.00232155 BTC

LTC
Users with at least 0.05 LTC in the wallet: 114
Quantity of LTC qualified for interest: 277.82206986 LTC
Daily interest amount at the maximum rate of 0.03%: 0.08334662 LTC (0.00110534 BTC)

DOGE
Users with at least 1000 DOGE in the wallet: 164
Quantity of DOGE qualified for interest: 2,430,086.33673017 DOGE
Daily interest amount at the maximum rate of 0.03%: 729,02590102DOGE (0.00028711 BTC)

For a better understanding of the following parts, we need to convert the amounts for our calculation basis to BTC (1 BTC = 7.798$). This results in a daily payout overall users of:
0.00232155 BTC+ 0.00110534 BTC + 0.00028711 = 0.003714 BTC

Summarised: StakeCube has to generate more than 0.003714 BTC per day to reward the users properly and to make a profit for the platform.
We do achieve this goal by investing in BTC mining. We split certain shares (more about this in the next section) of the coins to convert/invest them into mining power (GHS) and to cover withdrawals. We mainly use eobot.com as a mining provider which we have tested and talked to for about 1 year. Besides a fair fee, secure wallets and a live exchange (to withdraw in all offered coins) we have the advantage, that we can cash out the investment within 24h with a minimal loss, should the balance of the hot + cold storage not be sufficient. This way we guarantee that we can always pay out the coins back to the users if necessary. A small bonus for all of you who have read to this point:
Take a look at the eobot website. Theoretically, we can offer all coins for the interest that are listed there

Long story short: We currently make a daily turnover of around 0.005 BTC(- fees, etc) with around 240 THS which gives us a profit of roughly 0.001 BTC and allowing us to offer you the highest rates on the market.

But now we also need to talk about the most difficult part for us — the wallet allocation. Logically, we must always ensure that we maintain a healthy balance between investment, hot wallet and cold storage. For example, if we don’t invest enough, we would make a loss. Too small amounts in the hot wallet would block payouts. To find a solution for this, we analyzed the demand daily and adapted it to our needs. I would like to illustrate this to you using LTC:

Currently, we have 277.82206986 LTC, which are included in the interest calculation. The total of the withdraws for the last days looks like this:

- 2019–06–01: –0.04973713 LTC
- 2019–06–02: –3.59960271 LTC
- 2019–06–03: –0.75821781 LTC
- 2019–06–04: –0.17165622 LTC
- 2019–06–05: –0.77700000 LTC
= -5.35621387 LTC

At equal rates, a constant balance of around 5 LTC in the hot wallet is completely sufficient. Currently invested is 88 LTC into mining. (https://chainz.cryptoid.info/ltc/address.dws?MEV2dDpr6ujxj7yD5SM1pLABd5qbP7aLeS.htm)

As you can see we have
~32% invested in mining,
~2% stored in hot wallet and
~66% stored in cold storage

(Of course, the calculations are also valid for the other coins and our desired goal is to maintain a share of around 70%-50% invested and 30%-50% in a hot+cold wallet).

The numbers change minimally with every deposit, withdraw and investment, but are still usable benchmark (for you and us). Also, we still have enough puffer upwards if we need to buy more GHS to ensure we can pay our users properly.

In any case, I can say for sure that the coins are secured and a payout is ALWAYS possible.





The power of compound interest


As a small conclusion, I would like to show you why compounded interest is so amazing. Wikipedia explains it a good way:

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.

Let’s take a look at a more concrete example:
If we invest 1 BTC today at a daily rate of 0.015%, we get an interest of 0.00015000 BTC. The next day, a balance of 1.00015000 BTC is taken into account, which gives us a profit of 0.00015002 BTC. And it goes on proportionally like this…

Calculated up to 1 month or even 1 year and a rate of 0.03% daily, the whole thing looks pretty unbelievable:

1 BTC = ((1+0,03%)³⁰-1) = 0.00903926 BTC interest per month
1 BTC = ((1+0,03%)³⁶⁵-1) = 0.11570175 BTC interest per year




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